As discussed in the chapter, institutions are organizations constructed to create jobs for government
New institutional theory suggests that institutions be understood as collections of rules and codes of
conduct that limit behavior.
One of the significant differences between formal and informal institutions is how they gain
Informal cognitive institutions are not important to international managers because such managers
localize their hiring, and so they can draw on local talent.
International institutions provide nations the opportunity to build multilateral solutions, and thus make
significant contributions to international stability.
The United Nations operates with voluntary agreements, so it is essentially an informal institution.
The UN Environment Programme laid the groundwork for the Climate Change Convention, which led to
the Kyoto Protocol.
Permanent members of the UN Security Council vote on Security Council measures, and only the
secretary-general of the UN, Ban Ki-Moon, has veto power.
The UN International Court of Justice hears cases that involve disputes between national
10. By and large, the UN record of facilitating business transactions has been minor.
11. The Bretton Woods Conference established the European Union currency, the euro.
12. The World Bank funds infrastructure projects in developed countries.
13. Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is
struggling with core issues related to its purpose.
14. The World Bank is made up of one large institution, IBRD.
15. The International Finance Corporation (IFC) acts as an investment banker, arranging private risk ventures
in developing countries.
16. The WTO supports trade with discrimination as a basic right of trading nations.
17. The Doha Development Agenda is an extended development plan for Doha, Qatar.
18. Although India is a member of the WTO and has benefited greatly from increased trade as a result of
WTO agreements, China is not yet a member.
19. The WTO has negotiated a TRIPS agreement whereby property rights do not take precedence over public
20. Recently, regional trade agreements have grown, a trend that may be seen to strengthen the WTO,
according to the text.
21. Economic cooperation often begins with a common market, as in the case of the EU.
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